An Indian summer for investments
Doncaster hosts the Cazoo St Leger Day this Saturday. The oldest of Britain’s five horse-racing...
Jupiter European Fund
The Jupiter European Fund is a concentrated portfolio of 35-45 stocks. It will have at least 70% of the portfolio invested in the shares of companies that are based in Europe (excluding the UK). The remainder of the fund may be invested in other assets, including shares of companies based elsewhere in the world and in other closed or open-ended funds (including funds managed by Jupiter and its associates), as well as cash. It has recently had a change of manager, with Alexander Darwall leaving Jupiter and being replaced on the fund by Mark Nichols and Mark Heslop.
Our opinion
Mark Nichols is probably among the best successors Jupiter could have found for this fund and we were very impressed with him when he co-managed Elite Rated Threadneedle European Select with David Dudding.
He also has a very similar investment style and philosophy to that of Alexander, looking for quality growth companies. The major difference is that the fund is not only a lot larger, but also a lot more concentrated, so we will want to see how he settles into the new mandate.
Company description
Founded in 1985, Jupiter Asset Management has grown from a specialist investment boutique to a global fund management company. It provides a range of products from bond and equity funds to multi-asset strategies for both retail and institutional clients. Jupiter is a strong proponent of active management and therefore gives its managers the freedom to run their funds their way, without having to adhere to a 'house' view. In July 2020, Jupiter completed its acquisition of Merian Global Investors.
Fund manager
Mark Nichols joined Jupiter in July 2019 to manage the Jupiter European fund. Prior to joining Jupiter, Mark co-managed the Elite Rated Threadneedle European Select fund at Columbia Threadneedle. He began his investment career in the European equities team at Invesco in 2001, before moving to BMO Global Asset Management (F&C).
Mark Heslop joined Jupiter in September 2019 as a European equity manager and smaller companies specialist. Prior to joining Jupiter, Mark was an equity fund manager for 11 years at Colombia Threadneedle, where he managed a global smaller companies fund and a European smaller companies fund. He began his investment career as a chemicals and industrials analyst at Citi in 1999.
Investment process
The fund managers try to identify companies with first class management teams, strong business models exposed to the drivers of long-term growth and sustainable returns on capital.
Their investment approach is centred around achieving a depth of understanding in businesses and identifying the risks to their business models and growth expectations. When assessing stocks for inclusion in the portfolio, they consider a time horizon of 3-5 years and beyond, focusing on specific characteristics such as barriers to entry, strong branding, the holding of key patents, efficiencies of scale, and existing customers having high switching costs.
Another characteristic is industry structure, where they look for industries where there is no single customer who can drive prices down and no single supplier who can squeeze profit margins – because that means businesses are better able to generate consistent cashflow.
Risk
The concentrated nature of this fund means there can be stock-specific risk. The portfolio will typically be underweight in the telecoms, banking and property sectors and quite overweight companies with exposure to global revenues and hence to foreign currencies, particularly US dollars. There can therefore be some currency risk too.
Read more about this fund
Code red for humanity: how it impacts you and your finances
The sixth report from the Intergovernmental Panel on Climate Change (IPCC) in August 2021 made...
adviser only
Jupiter European: update from the managers, August 2021
August 2021 | Darius McDermott interviews Mark Nichols and Mark Heslop, co-managers of the Elite...
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.